LOCKDOWN LEVEL 1 Ver3 [ DAY 22]  

TOTAL DAYS 391 – 7 HOURS 35 MINUTES

Vaccine rollout day 78 / J & J VACCINE DAY 66 [SUSPENDED DAY 8]

By the close of trade on Tuesday 20th April 2021, the South African rand weakened against the US dollar.    Paying extra for additional legroom is one of the more infuriating aspects of air travel. Even more infuriating? Being asked to pay almost $800 million for it. Australian comedian Dave O’Neil, who later described himself as a “big man,” was flying for the first time since the pandemic hit Australia in March last year. But after deciding to book a seat on Qantas with extra legroom for his flight to Perth, he was amused to see the price pop up: $987,999,999 in Australian dollars, which works out to a little more than USD$770 million. Like any comedian presented with readymade joke material, he tweeted about it.

  • Toronto health authorities will order workplaces across Canada’s biggest city to close if they have more than five confirmed cases of Covid-19. The decision Tuesday overrides less stringent provincial orders, and follows a similar move by Peel Region, a western suburb. It comes as the city struggles to contain a surge in variant cases that threatens to collapse the local health-care system. Workplaces, or portions of workplaces, will be required to close for at least 10 calendar days if five or more confirmed cases of Covid-19 have been identified in a two-week period.
  • Companies are freaking out about soaring prices (as we will shows shortly), lumber has risen for 17 consecutive days, and crippled supply chains have pushed commodity and input costs (for those items that can still be found) to levels not seen in years, but all of this is news to Jerome Powell. In an April 8 letter from the Fed Chair to Senator Rick Scott, Powell said the overheating U.S. economy is going to temporarily see “a little higher” inflation this year as supply constraints push up prices in some sectors, but fear not – the Federal Reserve is committed to keeping any overshoot within limits.
  • Diplomats negotiating the revival of the Iran nuclear deal in Vienna today gave the strongest indications to date that Washington and Tehran are ready to set aside maximalist demands and work toward the eventual lifting of US sanctions that have crippled Iran’s oil exports. The joint commission that oversees the nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA), has “decided to create a third expert group to start looking into the possible sequencing of respective measures,” said the EU External Action Service’s Enrique Mora, who is coordinating the meeting.
  • A suicide bombing targeted Afghan security forces Tuesday in an attack that comes shortly after the U.S. announced its plan to withdraw from Afghanistan. Security officials told Reuters that the bombing targeted a convoy in Kabul, but no casualties were immediately reported. Afghan Interior Ministry spokesman Tariq Arian confirmed on Twitter that an explosion occurred in the area but provided no further details. The bombing is the first major attack to hit Afghanistan since President Biden last week laid out his plan to withdraw U.S. troops from the country.
  • The yield on benchmark government bonds rose yesterday. The yield on 2026 bond rose to 7.19%. Further, the yield on 2023 bond declined to 4.89% while that for the longer-dated 2030 issue rose to 9.07%.

In early trade on Wednesday, the US dollar is trading marginally higher against the South African rand at R14.3122, while the euro is trading marginally higher at R17.2267.   The British pound has marginally declined against the South African rand to trade at R19.9426.

By the close of trade on Tuesday, the euro advanced against most of the major currencies.

  • A European Central Bank lending survey showed that the eurozone banks expect to tighten access to credit further in the second quarter. It added that loan demand was also waning as firms were postponing investments while many were living off either liquidity buffers or direct government liquidity support.
  • The latest reading of Germany’s manufacturing PMI at 66.6 in March exceeded the previous all-time high in the 25-year history of the series by more than three points, merchandise exports have come close to pre-pandemic levels in February, and manufacturing orders have been recovering with almost no interruption since May 2020 and are now at their highest levels since December 2018. At the same time, service-sector PMI, which had enjoyed a brief phase of (above-50) expansionary readings in Q3 2020 before dropping back into contraction territory thereafter, only managed to edge modestly above 50 in March.
  • Western EU banks’ 2Q21 results will start to reveal the true extent of asset quality deterioration due to the pandemic, Fitch Ratings says in a new report. So far this has been masked by loan moratoria but a clearer picture should start to emerge now that most have expired. Fitch nevertheless expects loan impairment charges from loan moratoria to fall within the baseline estimates communicated in our 2021 outlook for western European banks. Outstanding moratoria in major western EU economies comprised just 3.5% of loans to households and non-financial corporates at end-2020, down from 6% at end-3Q20.

In early trade on Wednesday, the euro marginally slipped against the US dollar to trade at $1.2062, while it has marginally gained against the British pound to trade at GBP0.8678.

CURRENCY PATROL   

LOCKDOWN LEVEL 1 Ver3 [ DAY 15]  

TOTAL DAYS 385 – 7 HOURS 35 MINUTES 

Vaccine rollout day 71 / J & J VACCINE DAY 59 [SUSPENDED DAY 1]

By the close of trade on Wednesday 14th April 2021, the South African rand strengthened against the US dollar.  Worrying news as the Zuma saga escalates.  In his latest snub Zuma has defied a ruling by the Chief Justice to submit papers before the Apex court.  In another major development the President announced a shuffle of the Defense force heads as the “Old Guard” was removed and new names mentioned to head up the Army, Airforce, Joint Chiefs and Intelligence.

  • Retail sales in South Africa unexpectedly rose on an annual basis in February, as decrease in the second wave of Covid-19 infections and the end of alcohol bans might have seen more consumers going out to spend.
  • In the US, Fed’s beige book showed that economic activity between late February and early April. The U.S. economic recovery accelerated to a moderate pace from late February to early April as consumers, buoyed by increased COVID-19 vaccinations and strong fiscal support, opened their wallets to spend more on travel and other items, the Federal Reserve said on Wednesday. The labor market, which was decimated by the coronavirus pandemic, also improved as more people returned to work, with the pace of hiring picking up the most in the manufacturing, construction, and leisure and hospitality sectors. “Reports on tourism were more upbeat, bolstered by a pickup in demand for leisure activities and travel
  • The Arab coalition destroyed three explosive-laden drones launched by Houthis toward Saudi Arabia on Wednesday, Al-Ekhbariya reported. The drones targeting Jazan is the latest in a long line of attacks against the Kingdom by the Iran-back Houthi militia. The coalition said the attack is a continuation of the Houthi’s systematic and intentional hostile attempts to target civilians. The Houthis, who took over the capital of Yemen, Sanaa, in 2014, have been condemned for their actions against the Kingdom.
  • India reported more than 200,000 new infections on Thursday — its highest one-day surge since the pandemic broke out — as a deadlier new wave grips the world’s second worst-hit country. With 200,739 new cases, the outbreak in the South Asian nation has gone past 14 million. Casualties rose to 173,123 while more than 114 million vaccine doses have been administered, according to latest data from India’s health ministry. After seeing new infections ebb at the beginning of this year, Covid cases began spiking up since March.
  • The yield on benchmark government bonds fell yesterday. The yield on 2026 bond fell to 7.35%. Further, the yield on 2023 bond advanced to 5.02% while that for the longer-dated 2030 issue fell to 9.21%.

In early morning trade on Thursday, the US dollar is trading higher against the South African rand at R14.4122, while the euro is trading higher at R17.2572.  The British pound has gained against the South African rand to trade at R19.8562.

By the close of trade on Wednesday, the euro advanced against most of the major currencies.

  • The European Central Bank (ECB) Vice President Luis de Guindos stated that ECB will act on any detrimental rise in borrowing costs and considers removing stimulus too early a bigger risk than acting too late. One year into the pandemic, Europe finds itself at another turning point. New waves of infection are hitting the continent, requiring new lockdowns. But, unlike last year, safe and effective vaccines are now available. While the pace of vaccination is still slow, an end to the pandemic is in sight. Reflecting the periodic infection waves and the pace of vaccinations, the economic recovery in Europe is still halting and uneven. While industrial production has returned to pre-pandemic levels, the service sector is still contracting. While the pace of vaccination is still slow, an end to the pandemic is in sight.
  • Britain has agreed with the European Union that it will respond to the bloc’s legal action over how it has introduced new trading rules for Northern Ireland by mid-May, a spokeswoman for the government said on Wednesday. The EU launched legal action against Britain in March for unilaterally changing trading arrangements for Northern Ireland that Brussels says are in breach of the Brexit divorce deal agreed with London last year.
  • Australia will likely find Covid-19 has a lingering effect on the economy and the sheer scale of stimulus means it will probably be a couple of years before it’s clear how much has changed, former Reserve Bank board member Heather Ridout said. “People are operating differently, companies are having to operate differently and it’s going to take a long time before supply chains get back to what they were before,” Ridout said in an interview with Bloomberg News Wednesday. “There will be a new normal and I think worrying about pandemics and all of this will become part of the new normal.”
  • Bank of Japan Governor Haruhiko Kuroda on Thursday stuck to the view that the country’s economy is on a recovering trend despite the continuing impact of the coronavirus pandemic. Speaking during a videoconference with the central bank’s branch managers, Kuroda also pointed to difficulties companies face raising funds even under the BOJ’s accommodative monetary policy, saying the bank will not hesitate to take additional easing steps if needed.

In early trade on Thursday, the euro has slipped against the US dollar to trade at $1.1992, while it has marginally weakened against the British pound to trade at GBP0.8722.

LOCKDOWN LEVEL 1 Ver3 [ DAY 15]  

TOTAL DAYS 384 – 7 HOURS 35 MINUTES

Vaccine rollout day 71 / J & J VACCINE DAY 59 [SUSPENDED DAY 1]

By the close of trade on Tuesday 13th April 2021, the South African rand strengthened against the US dollar.  In South Africa confusion abounds as the Health Minister announced that the J&J vaccine had been placed on hold.  South Africa has up to now only administered 292 263 vaccines with no public announcement on vaccine registrations or program forthcoming.  This announcement followed on the heels of the US suspending J&J vaccines after 6 people had died after taking the vaccine.

  • In SA data released in mining, showed that production was better than expected in February, posting a first annual gain in a year as double-digit increases in the output of iron and manganese ore, as well as other non-metallic minerals, boosted the mining sector.
  • In the US, the consumer price index (CPI) rose by the most in more than 8-1/2 years in March as increased vaccinations and massive fiscal stimulus unleashed pent-up demand, kicking off what most economists expect will be a brief period of higher inflation. A gauge of global equity markets rose to record highs on Tuesday, led by surging technology-related stocks, as Treasury bond yields eased after U.S. consumer price data for March showed the pace of inflation was not rising wildly. The consumer price index rose 0.6%, the biggest increase since August 2012, as rising vaccinations and fiscal stimulus unleashed pent-up demand. But the data is unlikely to change Federal Reserve Chair Jerome Powell’s view that higher inflation in coming months will be transitory.
  • The pace of consumer inflation is likely to have returned to pre-pandemic levels in March, and it is expected to heat up even more in the next couple of months. Rising inflation is one of the biggest fears in the market, and if it gets too hot, it could corrode asset values, limit buying power and eat away at corporate margins.
  • Airport traffic is rebounding off of pandemic troughs in most countries, though Fitch Ratings’ latest quarterly Global Airport Tracker report says the proverbial runway to normal will not be in sight for years. Now reflecting a one- to two-year delay since its last report, Fitch now forecasts recovery estimates ranging anywhere from 4Q’23 to 2025 before airport traffic returns to 2019 levels. The obvious variable is new COVID-19 variants and surges in the number of cases, which caused additional or prolonged lockdown measures and could linger as vaccine roll outs remain slow and uneven on a global basis.
  • Billionaires like Bill Gates have long said that they, theoretically, would be in favor of paying much more money in personal taxes. And yet Gates and some of the wealthiest people in the world are staying silent on a series of active proposals that would do just that, sidestepping a legislative package in their home state of Washington that targets them specifically. Washington is home to four of the richest people on the planet: Gates, Amazon founder Jeff Bezos, Bezos’s ex-wife novelist MacKenzie Scott, and longtime Microsoft CEO Steve Ballmer.
  • China is taking more direct steps to mend relations with U.S. investors, ramping up its communication with businesses in an environment of heightened economic tensions between the two nations. Officials from the National Development and Reform Commission, the government’s top economic planning body, met Tuesday with representatives of companies like Tesla Inc., Qualcomm Inc. and Dell Technologies Inc. the first of possibly more similar meetings planned with U.S. firms.
  • The yield on benchmark government bonds fell yesterday. The yield on 2026 bond fell to 7.46%. Further, the yield on 2023 bond declined to 5.12% while that for the longer-dated 2030 issue rose to 9.34%.

In early trade on Wednesday, the US dollar is trading lower against the South African rand at R14.4954, while the euro is trading lower at R17.3732.  The British pound has marginally declined against the South African rand to trade at R19.9572.

By the close of trade on Tuesday, the euro advanced against most of the major currencies.

  • Investor sentiment in Germany fell unexpectedly in April, citing rising fears that private consumption could be depressed as Europe’s largest economy gets closer to extending lockdown measures.
  • In the UK, Gross Domestic Product (GDP) rose less than expected on a monthly basis in February, showing a partial recovery in post-Brexit trade with the European Union.
  • Japan’s core machinery orders unexpectedly fell the most in about a year in February, government data showed, dashing hopes for a pick-up in capital expenditure needed for a private sector-led recovery from the coronavirus-induced slump. Policymakers are counting on companies to spend their huge cash piles on investment in plant and equipment and wage hikes to help pull the world’s third-largest economy out of deflation and stagnation.

In early trade on Wednesday, the euro has advanced against the US dollar to trade at $1.1972, while it has marginally gained against the British pound to trade at GBP0.8722.

LOCKDOWN LEVEL 1 Ver3 [ DAY 13]  

TOTAL DAYS 382 – 7 HOURS 35 MINUTES

Vaccine rollout day 70 / J & J VACCINE DAY 58

By the close of trade on Friday, the South African rand weakened against the US dollar.

  • Locally there are just days of reckoning for Zuma and Judge Hlophe. Will the ConCourt and JSC imprison and push to impeach respectively?
  • Hideki Matsuyama’s historic win at Augusta National is going to make him very rich. The 29-year-old became the first Japanese man to win a golf major by finished 10-under to win the Masters by one shot from American debutant Will Zalatoris. Masters win ‘worth a billion dollars’ Matsuyama’s victory will see him rival Naomi Osaka as the most famous athlete in Japan and could make him a billionaire, according to two-time US Open winner Andy North.
  • In the US, producer price index (PPI) increased more than expected in March, resulting in the largest annual gain in 9-1/2 years and likely marking the start of higher inflation as the economy reopens amid an improved public health environment and massive government aid. The U.S. economy is at an “inflection point” with expectations that growth and hiring will pick up speed in the months ahead, but some risks remain, particularly any resurgence in the coronavirus pandemic, Federal Reserve Chair Jerome Powell said.
  • Wholesale inventories increased slightly more than initially estimated in February amid a decline in sales.
  • The European Union’s top diplomat said on Sunday Russia and China were hampering a united international response to Myanmar’s military coup and that the EU could offer more economic incentives if democracy returns to the country. “It comes as no surprise that Russia and China are blocking the attempts of the U.N. Security Council, for example to impose an arms embargo,” EU foreign policy chief Josep Borrell said in a blog post.
  • The yield on benchmark government bonds rose on Friday. The yield on 2026 bond rose to 7.42%. Further, the yield on 2023 bond advanced to 5.15% while that for the longer-dated 2030 issue rose to 9.28%.

In early trade on Monday 12th April 2021, the US dollar is trading  higher against the South African rand at R14.6266, while the euro is trading higher at R17.3935.  The British pound has marginally declined against the South African rand to trade at R20.0172.

By the close of trade on Friday, the euro advanced against most of the major currencies.

  • German trade surplus narrowed in February, as exports to the UK and other EU states fell.
  • In a rare admission of the weakness of Chinese coronavirus vaccines, the country’s top disease control official says their effectiveness is low and the government is considering mixing them to get a boost. Chinese vaccines “don’t have very high protection rates,” said the director of the China Centers for Disease Control, Gao Fu, at a conference Saturday in the southwestern city of Chengdu. Beijing has distributed hundreds of millions of doses abroad while trying to promote doubt about the effectiveness of the Pfizer-BioNTech vaccine made using the previously experimental messenger RNA, or mRNA, process.
  • The Federal Government has abandoned its target of offering every eligible Australian their first COVID-19 vaccine dose by October 31. In a Sunday night statement, Prime Minister Scott Morrison said “it is not possible” to provide new timelines given “uncertainties” in the rollout. The confirmation comes days after Australian health authorities recommended those under 50 receive alternatives to the AstraZeneca vaccine, which was a cornerstone of the nation’s rollout scheme.
  • Japanese wholesale prices marked their first annual increase in more than a year in March, data showed on Monday, a sign that rising commodities costs are pinching corporate margins, adding inflationary pressure to the world’s third-largest economy.  Japanese bank lending rose 6.3% in March from a year earlier, data showed on Monday, as restaurants and hotels sought more loans to weather the hit from the COVID-19 pandemic. Deposits held by banks were also up 9.9% in March as households continued to save rather than spend on uncertainty over the pandemic’s fallout, the Bank of Japan data showed. Outstanding loans held by the country’s four main categories of banks, including “shinkin” or credit unions, hit a fresh record at 579.995 trillion yen ($5.29 trillion), according to the data. In February, total loans increased 6.2%.

In early trade on Monday, the euro has slipped against the US dollar to trade at $1.1927, while it has gained against the British pound to trade at GBP0.8572.

LOCKDOWN LEVEL 1 Ver3 [ DAY 9]  

TOTAL DAYS 378 – 7 HOURS 25 MINUTES

Vaccine rollout day 66 / J & J VACCINE DAY 54

 By the close of trade on Thursday 8th April 2021, the South African rand strengthened against the US dollar.

  • In the South Africa, on the data front, manufacturing output contracted more than expected in February, led by declines in the output of petroleum, chemicals, rubber, plastics, furniture and metal products.
  • Federal Reserve Chair Jerome Powell on Thursday signaled the central bank is nowhere near to reducing its support for the U.S. economy, noting that an expected rise in prices this year is likely to be temporary, and warning that an uptick in COVID-19 cases could slow the recovery. “Cases are moving back up here, so I would just urge that people do get vaccinated and continue socially distancing,” said Powell, who has been vaccinated himself, speaking at an economic forum during the virtual International Monetary Fund and World Bank meetings.
  • On March 31, 2021, President Biden released the American Jobs Plan (AJP). This plan proposed $2.3 trillion in new federal spending on various forms of public infrastructure, research and development, workforce training, affordable housing, and caregiving. Later reporting confirmed that the AJP would include an additional $400 billion in clean energy tax credits not specified in the administration’s original announcement. In total, the AJP proposes $2.7 trillion in new federal spending over the next 8 years, 2022 to 2029.
  • China’s producer prices climbed the most since July 2018 as commodity costs surged and the economy’s recovery strengthened. Consumer prices gained for the first time in three months. The producer price index rose 4.4% in March from a year earlier after gaining 1.7% in February, the National Bureau of Statistics said Friday. The median forecast in a Bloomberg survey of economists was 3.6% The consumer price index rose 0.4% from a year earlier Key Insights After months of deflation, producer prices have started to pick up sharply this year as the cost of oil, copper and agricultural goods rallied.
  • On the data front, the number of people filing new claims for unemployment benefits unexpectedly rose for the week ended 2 April, but the increase likely understated the rapidly improving labour market conditions as more parts of the economy reopen and fiscal stimulus kicks in.
  • The yield on benchmark government bonds fell yesterday. The yield on 2026 bond fell to 7.36%. Further, the yield on 2023 bond declined to 5.14% while that for the longer-dated 2030 issue fell to 9.21%.

In early trade on Friday, the US dollar is trading higher against the South African rand at R14.5474, while the euro is trading higher at R17.3152.   The British pound has gained against the South African rand to trade at R19.9762.

By the close of trade on Thursday, the euro advanced against most of the major currencies.

  • The eurozone producer price index (PPI) increased at an accelerated pace on an annual basis in February due to surges for energy and intermediate goods.

In early trade on Friday, the euro has slipped against the US dollar to trade at $1.1964, while it has weakened against the British pound to trade at GBP0.8672.